UK based betting firm Ladbrokes has released its first half 2013 financial results, noting that profits dropped 19.8% during the period.
Key financial indicators for the period ending June 30th were:
Group net revenue up 6.4% or 0.9% when adjusted to reflect change in machine taxation from VAT to MGD
Group operating profit £85.7 million down 19.8%
Underlying EPS of 7.2p down 23.4%
Net debt of £375.5 million reduced by £11.4 million
H1 exceptional cost of £21.8 million (FY est. £33 million) associated mainly with transition to Playtech product and platforms
Digital profit down but in line with expectations
Increased machine taxation and like for like content costs in UK Retail total c.£9 million in H1
Decline in OTC gross win per shop driven by Q1-2013 staking decline; Q2-2013 trend improved
Machine gross win up 3.2% driven by expansion in number of shops and increase in density
Slowdown in machines market greater than expected; decline in gross win per shop per week of 0.5% for H1-2013
Machine Q1-2013 exit rate of c. 3 percent like-for-like growth not maintained and inconsistent in Q2 with 5.5% decline in June
While admitting that the company did not live up to expectations during the first half of the year, Ladbrokes CEO Richard Glynn was optimistic for the second half. Speaking about the group's retail operations Glynn said, "Having established a position of market leadership in machines, with like for like revenue increasing by c.40% in the last 3 years, we always planned for a slowdown this year. We continue to compete strongly in a highly competitive market and have a number of initiatives in place for H2, including a new cabinet rollout starting in Q4."
Glynn then spoke about Ladbrokes' digital products, noting: "In Digital, our partnership with Playtech will see us deliver a compelling online and mobile offer for customers underpinned by proven software, operated by experts. During H2 we will build on early progress already made by adopting Playtech products and technology and expect to benefit from new marketing and CRM capabilities. We aim to finalise the integration early in 2014, thereby enabling significant growth in earnings."